RE:Hedging StrategiesNice post.
My opinion: I am paying ARC management to produce oil/gas/liquids. I am not buying into ARC with the expectation that the company is speculating on the future direction of pricing. Thus I think their hedging strategy should be limited to effectively running the company and ensuring the predictability of cash flows, and the alignment of cash flow with capex, dividends, debt repayments, etc..
They will obviously expand production when faced with higher prices and vice versa, but I'm not expecting them to go whole hog on hedges at a given point in time. Everyone always talks about hedges as bad or good, but the reality is if done right there are no bad hedges unless they are taken out for the wrong reason.